First Horizon Corporation

Good morning and welcome to the First Horizon Corporation third quarter 2021 earnings release conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star then one on your touchtone phone. To withdraw from the question queue, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Ellen Taylor, Head of Investor Relations. Please go ahead.

Thanks, Kate. Good morning, everyone. We really appreciate you joining us on such a busy day. This morning, our President and CEO, Brian Jordan, and our Chief Operating Officer and Interim CFO, Anthony Rissell, will provide some prepared remarks, and then we'll be happy to take your questions. And we're pleased to have Susan Springfield, our Chief Credit Officer, in the room with to assist with that effort. So I need to remind you that we will make forward-looking statements today that are subject to risk and uncertainty, and we ask you to review the factors that may cause our results to differ from expectations on page two of our presentation and in our FDC filing. You can find our earnings materials on our website at ir.fhnc.com. Additionally, you need to be aware that our comments will refer to adjusted results, which exclude the impacted notable items. These are non-GAAP measures, so it's really important for you to review the GAAP information in our earnings release and on page three of our presentation. And last but not least, you need to understand that our comments reflect our current views and that we aren't obligated to update them. And with that, I'll hand things over to Brian.

Thank you, Ellen. Good morning, everyone, and thank you for joining the call. I'm pleased with continued progress across our company this quarter and believe that our results demonstrate the benefit of our more diversified model. Our attractive base of specialty businesses and higher growth markets are starting to drive our performance. We delivered EPS of 50 cents a share and a return on tangible common equity of over 18% on an adjusted basis. despite the near-term headwinds that the industry is facing, with continued pressure on short-term rates and strong competition, giving growing levels of excess liquidity and muted loan demand. Given the continued improvement in the macroeconomic environment as markets reopen, I'm increasingly confident that our client-focused value proposition with a broad product set positions us well to be nimble and focus on the key segments where we can differentiate. As a result, there were several bright spots in the quarter that I think are worthy of noting. While net interest income was down in the quarter given expected reductions in net merger related and triple P portfolio benefits, we generated core net interest income growth of 1% with underlying loan growth of 1%, which was driven by commercial loan growth of 2%. We continue to see momentum in our commercial pipelines, and the quarter ended with unfunded commitments up 5% to just over $19 billion. Our team remains strongly focused on serving clients and anticipating their needs to continue to deepen relationships across our expanded footprint. Our net interest-bearing deposits declined three basis points Our net interest by the cost declined three basis points in the quarter. The team is intensely focused on moving our costs toward peer median, and we think we are well positioned to hit the target sometime next year. It's also important to note that we are well positioned to benefit in a rising rate environment and end of the quarter with interest rate sensitivity profile of a 16% increase in net interest income and a 100 basis point shock across the yield curve. And while we expected total fees to be down given relatively healthy levels of fixed income and mortgage banking fees last quarter, we also saw a return to more normalized levels in traditional banking fees, which were up 2% in the quarter, with particular strength in wealth on strong annuity sales. Credit quality continues to be excellent, with improvement in the overall quality of the loan portfolio highlighted by net charge-offs of only two basis points and a 47% decrease in loan balances on deferral in the quarter. That, coupled with improving macroeconomic environment, drove another robust reserve release with a provision credit of $85 million in the quarter. This was a 26% decrease in the provision benefit this quarter versus last quarter. Given the impact of CECL, as we look ahead, provision expense will likely be a headwind for us and the industry overall. As our capital levels remain strong with a CET1 ratio of around 10.1%, we increased our capital return by nearly 60% in the quarter, repurchasing 9 million shares of common stock, and ended the quarter with a tangible book value per share And despite the difficult decision to delay the systems integration until February of next year, we continue to execute on the objectives of the MOE, with strong progress on integrating systems and aligning products and capabilities, including piloting the new digital platform for Treasury services, launching new relationship and banker profitability tools, and completing first round of banking center consolidations. Given some higher costs tied to integration of our platforms along with higher costs due to markets reopening, much of which is marketing, as well as the seasonality and the idiosyncratic items in our expenses, we're up 3% in the quarter. However, as Anthony will cover later, we expect expenses to moderate in the fourth quarter. Alongside our integration efforts, we continue to invest in technology and people to drive revenue synergies and expense efficiencies. And thus far, we've identified approximately $35 million in revenue synergies tied to the merger. We remain confident in our ability to deliver at least $200 million in net annualized savings by the fourth quarter of next year. As we begin to look ahead into next year, I'm increasingly optimistic about the pace of the macroeconomic recovery as the world emerges from the pandemic, and that the power of our combined organization will continue to be increasingly evident. I'm very grateful for the dedication and hard work of our associates as they continue to work to deliver value for all of our constituents, clients, communities, and shareholders, and help drive the momentum to achieve our long-term performance objectives. And now, Anthony will run through the financial details. Anthony?